Competitive Analysis Series – Positioning

One of the key take-aways from a competitive analysis exercise is how you end-up positioning your product (and your organization) against those competitors. Especially early on in a product’s lifecycle, this is crucial. When you have executives out there talking up what you’re doing, the last thing you want is for them to blurt out something about “oh, company so-and-so? Yeah, compared to us they are just horrible. We are SO much better.”

Better to be prepared for those situations.

I’ve done this a couple of different ways – typically in the form of a quick reference sheet just listing the competitors you are researching and the providing some basic points about how you and your offering are different. Of course, you are communicating how you are in fact better – but you don’t want to come out and specifically say that. If you did, it wouldn’t be competitive positioning.

Let’s look at some examples.

Example – Gaming Consoles

I play video games pretty regularly and I have an XBox 360, PS-3 and PSP. So for the sake of this exercise, let’s say you are competitively positioning the XBox 360 against the PS3.

Point 1 – The PS3 supports Blu-ray technology.

XBox 360 – Potential Positioning

While the 360 does not have this functionality yet, it’s something we are very actively pursuing. We recognize the quality of blu-ray discs is unmatched in the market, however we wanted to ensure we kept pace with the overwhelming market trends for consumers and gamers alike.

We’ve found that while they are picking up in popularity, the vast majority of our customers continue to purchase for DVDs.

Point 2 – The PlayStation Network and Store are extremely user friendly and offers games on-demand.

XBox 360 – Potential Positioning

We agree that the PlayStation Network and store offering are solid and well thought out.

XBox Live has all of the same functionality, and actually strives to provide a deeper engagement with a customer’s lifestyle by providing a robust experience that includes tight integration with MSN Messenger, social networking capabilities, complete games on-demand (new and older titles), custom community-created games, as well as our extremely popular XBox Live Arcade.

Point 3 – Sony offers a superior development platform for game developers to leverage.

XBox 360 – Potential Positioning

While the PlayStation has excellent hardware at its disposal, Microsoft has a long-standing reputation of working hard (and really well) with the development community. With our depth of expertise, we are confident the tools and SDKs we provide to our partners ensure a smooth development process.

In doing so, we help them to get their games on the shelves as fast as possible, while still maintaining the necessary rigor with game testing and development to guarantee quality.

I hope that provides a good idea of what you are looking to accomplish by positioning against competitors.

One of the keys is acknowledge what the competitor DOES have without going overboard and making it sound like it’s the best. Of course Sony has a fantastic piece of hardware. It’s well-built, has top-of-the-line components and the Sony brand backing it up. So it would actually hurt MSFT to sit there and think, “gee Sony just totally sucks. They have nothing to offer – how could anyone possibly even entertain the idea of buying such an expensive and poorly put together piece of plastic?”

Acknowledge what the competitor does and then immediately shift back to how your organization and your product are better – and why. Doing this kind of thing really opens up the fluff gates. Again, MSFT could start throwing around terms and phrases that make no sense but sound really, really shiny. For example, “…the 360 is a robust tool for lifestyle convergence.” Stick to what it is – a DVD player, a gaming console, with some other really cool things added that are loved and adored by certain segments of the market.

It’s crucial to keep it on a track that everyone can understand what it is and why it’s great. Another helpful resource may in fact be your sales group – they very well may be able to shine some light on what the competitors are saying to win deals (i.e., how are they positioning their product against yours). This can certainly help when coming up with ways to position around the competitors.

However, all of this at the end of the day is simply wordsmithing – you as the product manager must be able to separate fact from fiction and control fluff that may be getting put out there in a sales cycle, or in marketing collateral. Always, always base how you are positioning in fact, not “what sounds good today.” You’ll get in to far less trouble that way, and engineering will probably end-up thanking you for it at some point down the line.

Tagged as: analysis, competition, market data, positioning, research